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Dell Has Labor Pains

Thu, 08/12/2010 - 6:25am
Manufacturing.net

NEW YORK (AP) -- Dell Inc. heads into its annual shareholder meeting Thursday facing pressure from big labor groups who want to strip founder and CEO Michael Dell of his position as chairman.

The push from the AFL-CIO and the American Federation of State, County and Municipal Employees, comes in response to accusations that Dell pumped up its quarterly earnings reports with undisclosed payments from the chip maker Intel Corp.

The world's third-largest PC maker settled the case with the Securities and Exchange Commission for $100 million last month without admitting or denying any violation. Michael Dell agreed to pay $4 million separately.

Labor groups say the case illustrates the need to put more of a check on the company's founder and split the role of CEO and chairman.

In a letter to shareholders, they pointed out that the proxy service Institutional Shareholder Services advocates the same measures.

The groups are also pushing for an annual advisory vote on executive compensation.

Dell, which is based in Round Rock, Texas, has said it will stand by its chief despite the SEC's allegations.

In a statement announcing the settlement last month, Dell board member Sam Nun said, "Dell's Board reaffirms its unanimous support for Michael Dell's continued leadership, and the management team in its ongoing commitment to transparent accounting, integrity in financial reporting and strong corporate governance."

The company's shares fell 3 cents to $12.07 ahead of regular trading.

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